Court Refuses to Stop NFIU from Implementing Guidelines on LG Funds


The Federal High Court in Abuja has refused to restrain the Nigerian Financial Intelligence Unit (NFIU) from implementing its recent guidelines on local government funds.

The ruling by Justice John Tsoho marked yet another setback to the 36 governors in their efforts to keep control of local government finances in their respective states.

In the guidelines that took effect on June 1, the NFIU directed banks not to honour transactions in the joint accounts of state and local government areas (LGAs).

It said such accounts should only be used to distribute allocations to accounts of LGAs directly.

The Nigerian Governors Forum (NGF) recently sued the NFIU, saying the directive was illegal because it contradicted the constitution.

The constitution prescribed joint ownership of account between a state and all local government areas under it, but there have been claims that the governors have been mismanaging the funds by bullying local authorities into silence.

At the resumed hearing on the matter on Monday, Justice Tsoho declined to allow the governors continue to draw funds from local government accounts until the matter had been concluded by the court, which could take several months or even years.

Further hearing on the matter could not continue yesterday, after the lead lawyer for the governors, Lateef Fagbemi (SAN), failed to appear in court on excuses that he was handling another matter at the Presidential Election Petitions Tribunal.

Although there was an initial agreement by all parties to wait for Fagbemi, who had promised to appear in court before noon, the court eventually adjourned the matter when he did not show up.

A further hearing was adjourned till October 23 for all applications, including one challenging the court’s jurisdiction, to be heard.